Peter Flack: DRC: Ex Africa Semper Aliquid Novi – not
Pliny’s much over-used and abused quote, that there is always something new from Africa, has long outlived its relevance. In fact, for the last 50 years or so the news from Africa has become depressingly the same.
The recent moves by the DRC government to tear up their agreement – enshrined in an act of their own parliament – with overseas mining companies trying to help resuscitate their pale shadow of what an economy is meant to provide for its citizens, is a case in point of the endless cycle of repetition, and demonstrates the natural resources curse that has bedevilled Africa.
For the sake of the argument, assume for a moment that power in Africa comes from being able to buy the biggest weapons and commanding those who can and will use them. In other words, power is something you take. Authority, on the other hand, is what citizens give leaders who have demonstrated the honesty, hard work and ability to improve the lot of those self-same citizens. The abundant natural resources that Africa is endowed with, in its simplest form, allows “leaders” to divert the revenue derived from their exploitation and use it to buy weapons, soldiers, police and politicians without having to rely on their citizens to abide by their laws and pay their taxes. In other words, having taken the power, they do not need authority.
This is at the heart of the premise behind Why Nations Fail – The Origins of Power, Prosperity and Poverty by Messrs Daron Acemoglu and James A. Robinson.
I had dinner last week Monday with Mark Bristow, CEO of Randgold Resources, the London-listed African gold miner and the effective 45% owner of Kibali gold mine in the DRC. In my humble opinion, Bristow (who holds a doctorate in geology from Natal University) is the best African mining executive the continent has produced in the last couple of generations. While I was lucky enough to be his CEO for a few years and helped raise the finance to support his original vision, it was the strategy he and his team of geologists developed which, from a standing start less than 25 years ago, has created an African gold mining group encompassing five active gold mines with a market capitalisation of some $8-billion (prior to the events of last week), which is greater than that of AngloGold Ashanti, which had scores of years of a head start.
Bristow is not one of those expatriate lighthouses – now you see them, now you don’t. He is an African through and through with homes in Johannesburg and Mauritius. He spends most of his holidays in Africa on transcontinental motorbike expeditions to raise money for charity, scuba diving off the coast and pursuing big game on foot and conserving them at the same time via his game ranch in the Eastern Cape. He is steeped in all things African and, from the first time I met him, has always been the straightest of straight shooters. So, when Bristow speaks about African mining, I and many, many others listen intently.
He was obviously deeply disturbed by the recent moves by the DRC government to unilaterally breach the agreement with the major overseas mining companies enshrined in an act of parliament – and which sets out the government’s take from the revenue streams generated by their operations – but also that the proposed amendments were contrary to what had been agreed with these companies after months of painstaking discussions and negotiation with the DRC minister of mines. These changes, which the DRC have now instituted, effectively amount to expropriation without pay and, if signed into law by Kabila, will not only put an end to foreign direct investment in the DRC but be the begining of the end of most, if not all, of the current mining companies. Would you invest a cent in a country that does what the DRC is proposing to do?
So, no new mines being opened for the foreseeable future and the existing ones gradually shrinking and dying as the ore runs out and no further prospecting is done to replace that which has been mined. Quality mining staff leaving as they see the writing on the wall, nothing more than bare minimum maintenance, just sufficient to keep the operations limping along.
Once proud facilities providing schools, hospitals, on-the-job training, electricity supplied by the mines, road connections to other centres (which allow the locals to get themselves and their products and services to markets), all decaying as funds that would have been available for re-investment are sucked out of the mining companies into the unaccountable maw of what passes for government in the DRC. It is not a new story in Africa and certainly not a new one in the DRC and yet the people in leadership roles there persist in playing it even when the outcome explains why the DRC with all its mineral wealth is in the desperate, shoddy and virtually ungovernable state in which it is. It is the natural resources curse of Africa at its most obvious.
Does this have something to do with the over $500-million that has gone missing from the Gécamines coffers (the DRC state mining company)? Is this why the Gécamines CEO is one of the foremost and most vocal supporters of these grossly dishonest manoeuvres? In other words, to replace the revenue that has disappeared from his corporation? Does it have something to do with Kabila’s attempts to serve a third and unconstitutional term? Is it because he is alleged to be befuddled for most of the day as a result of the cocktail of drugs he uses and abuses and can be easily manipulated by those around him? Who knows for certain, but possibly somewhere in this morass of deceit and deception lies the truth.
What is certain is that the DRC is treading a well-trodden path leading down the inevitable spiral towards a failed state, and the current attempts by some mining executives to appease the unappeasable appetite of the corrupt, incompetent crooks in positions of power in the DRC are not the way to go.
All it will do is encourage them to try to steal more. Appeasement does not work with your children, appeasement does not work in politics as Chamberlain and many others have found out to their cost.
In my humble opinion, the only way forward is to do what Bristow proposes and that is face these effective expropriation attempts head on and refer that matter to international arbitration. That way at least the world will be able to see the full extent of the DRC’s grubby and greedy treachery. DM